"True prosperity consists of more than money," Dr. Inboden continued. "It also includes happiness, health, and liberty. The Prosperity Index shows that in addition to economic success, a society's prosperity is based on strong families and communities, political and religious liberty, education and opportunity, and a healthy environment.
The Index defines prosperity as a holistic combination of material wealth and life satisfaction, measuring how well nations are promoting both economic growth and quality of life. Australia holds the top spot, narrowly ahead of Austria and Finland; Yemen ranks last, following several African nations including Zambia and Zimbabwe.
The Prosperity Index assesses 104 nations around the world by measuring 44 different indicators of both economic competitiveness and liveability.
The United States achieves a high ranking due to its combination of strong economic policies and a good quality of life. In particular, the U.S.:
- is the only country besides Ireland in the Index to register medium or strong scores in every category;
- leads the world in per capita income;
- scores especially high in its growth in invested capital and its ability to commercialize innovation;
- has the highest social capital score among the top 10 countries except for New Zealand;
- is the only nation among the top 25 to receive a positive rating for religious involvement among its citizens.
However, among other leading nations, the U.S. is slightly outpaced on some key quality of life indicators such as good health and leisure time, and on a few economic measures such as the quality of its trade and regulatory environments.
Australia leads the Index because of its strong performance in education, governance, and promoting entrepreneurship. All successful countries demonstrate several common attributes, with the top ten scoring especially high on five economic indicators:
- Growth in Invested Capital
- Good Governance on economic issues
- Commercialising Innovation
- Good Governance on political issues
- High Incomes
All but Singapore and Hong Kong scored nearly as well on community life and family life indicators, which are important measures of social capital. Conversely, the bottom 25 percent of the Index countries received especially low marks on the above indicators, as well as Freedom of Choice. They are particularly burdened by low incomes and high dependence on foreign aid.
The 2008 Prosperity Index finds that both individuals and governments have a role to play in promoting national prosperity. Alan McCormick, a Managing Director at Legatum, observed, "The 2008 Legatum Prosperity Index reveals that governments alone cannot mandate prosperity, but they can foster an environment that encourages prosperity through implementation of wise policies. Individual citizens are responsible for taking ownership of their lives and, in richer countries, embracing the opportunities that accompany increased freedom and privilege."
Mr McCormick concluded that, "Amidst widespread global economic insecurity, the findings of this year's Index could not be timelier. The Prosperity Index is a manifesto for advancing long-term national prosperity which can act as a guide for leaders from all sections of society."
